Friday, 14 December 2007

Money Laundering Checks - More stealth taxes?

On 15 December 2007, the Money Laundering Regulations 2007 come into effect in so far as they extend to estate agents.So what!?Agents have always identified customers before, haven’t they?

Well, all estate agents are required to put in place anti-money laundering controls ‘…in order to anticipate and prevent your business being used by criminals to launder money and fund terrorism…’

To prevent the next axis of evil training camp from forming in your back yard, the government states that estate agents must comply with a number of mundane tasks.Simply put,agents will need to confirm their customer’s identity, which means in practice, we suspect, looking at a driving licence and crumpled utility bill.There are other requirements such as appointing an office member to head up your office MI5 unit and training your staff in counter surveillance, but all this is really just a revenue spinner for the OFT :

Lettings agents will not be able to enter this exciting world of espionage unless they engage in estate agency work, which of course has a lengthy definition, but effectively means if you are also selling.

The list of obligations if you can bear to read:

• confirm your customer's identity before entering into a business relationship or occasional transaction with them and obtain information on the purpose or nature of the business relationship

• conduct ongoing monitoring of the business relationship as appropriate to ensure that transactions are consistent with your knowledge of the customer and the customer's business

• keep records obtained in establishing your customers' identity and of business relationships for five years

• put in place checks, controls and procedures in order to anticipate and prevent money laundering or terrorist financing

• train your staff in those procedures and in the law relating to money laundering and terrorist financing

• appoint a nominated officer or money laundering reporting officer (MLRO). The MLRO should receive and consider internal disclosures of suspicious activity from within your business and make suspicious activity reports to the Serious Organised Crime Agency

We will be providing some more information within our Agent area and withing this blog in the coming months.

A number of companies are providing credit checking systems for estate agents, which come at a huge premium.Rightmove for one are charging per search through a third party system.Is this level of credit checking really necessary to meet the requirements of the regulations?